Solutions Sidebar: The 12 Steps of Town Making with Monte Anderson.

An effort to improve one man’s suburban Dallas neighborhood is now spreading across the country, even touching South Bend, Indiana. Incremental developer Monte Anderson coined the term “gentlefication,” valuing people and buildings as he envisions what an area could look like. He’s teaching other cities how to do it.

Interview guest: South Dallas community developer, landlord, and “town maker” Monte Anderson helps others find their “farm.”

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Transcript

Ann Thompson:

Suburban Dallas developer and community activist Monte Anderson coined the term “Gentlefication,” putting both buildings and people at the center of stabilizing neighborhoods.

Monte Anderson:

I might loan them a down payment. I might co-sign on the note with them. That's where you get the secret sauce.

Ann Thompson:

He takes ugly properties like old strip malls and abandoned schools and retrofits them into modern properties, transforming communities, and adding some housing along the way. He's teaching others how to do it.

Monte Anderson:

We've been hired all the way from Canada all through the United States to go in and help mostly the red lined part of cities, the sides of the cities that have been neglected for a long time.

Ann Thompson:

Stay tuned for a solutions sidebar, and my colleagues Hernz Laguerre Jr. And Emiko Moore will join me at the end for some takeaways. Let's get into it. This is Brick by Brick: Solutions for a thriving community.

Ame Clase:

Brick by Brick is made possible thanks to leading support from Debra and Robert Chavez, Greater Cincinnati Foundation and the George and Margaret McLane Foundation, with additional major support from The AES Ohio Foundation, Laurie Johnston and the Seasongood Good Government Foundation, Diane and Dave Moccia, The Robert and Jean Penny Endowment Fund of The Dayton Foundation, P&G, the Robert & Adelle Schiff Family Foundation, and more. Thank you.

Ann Thompson:

Monte Anderson, Welcome to Brick by Brick.

Monte Anderson:

Thank you.

Ann Thompson:

There are a lot of ways people have described you. Incremental developer, town builder, champion of South Dallas, a builder of lovable places. How do you describe yourself?

Monte Anderson:

Well, I'm just kind of a local guy in southern Dallas County where I grew up and over the years because I didn't like the way I saw my neighborhoods moving and developing that slowly but surely over time I started off as a real estate agent. I thought I could affect change as a real estate. I could bring the right people in as a real estate agent. And then over time I found out that no one was going to come and do it for us. No one was coming to save us in South Dallas. So I became a real estate developer or town maker as I like to call myself.

Ann Thompson:

And this kind of goes to the next question. You say that desperation motivated you to start revitalizing your hometown of Duncanville, Texas. Describe the city and some of your projects along the way.

Monte Anderson:

And it's really southern Dallas County, but Duncanville is where I live today, but I either live either in DeSoto, Duncanville or Dallas, south Dallas my whole life. But yeah, the city's here were really created out of white flight in the seventies and eighties. People moving from Dallas to the first ring suburbs and they went up, all of those suburbs went up and over time when they got a little bit older, people moved to the next place. And then there's white flight and black flight and brown. So it's like people are always moving from places that they don't love. So that's really how I got started. I really tried to figure out how do I reverse that.

Ann Thompson:

So give us some examples. What would you be like driving down the road and you'd see some vacant strip mall and then you would envision what it could become?

Monte Anderson:

That's really it. I mean, I'm driving down the road. I always talk to people about looking for the opportunities when you're a town, town builder, champion in your community, and that type of person is somebody that cares about the community. The project is not just the one building, the project is the neighborhood. And that is right. You drive down the street and you see something that's ugly, an old rundown, shopping center, empty buildings, things like that. And those are the opportunities. Those are usually the opportunities where people are selling those properties for less money. And then if you could re-envision those properties into something more modern, more urban, more walkable, then you can make money off of it and do good. So our philosophy is making money is most important, but doing good is equal

Ann Thompson:

And you're doing it incrementally, as you pointed out organically without government subsidies. Where do you get the money and how do you make money?

Monte Anderson:

Well, we don't always do it without government subsidies. Okay. Not always. I don't like government subsidies because I don't think it's a healthy way for us to keep going. In fact, we're fixing to find out right now how little government subsidies we're going to have in the future out of money. I mean the whole country is out of money, but what we do is we do two things. We first go to the banks, the local banks, commercial banks are still the best partner to have, and we find out how much will you loan me on this project, Mr. Banker or Mrs. Banker, how much will you loan me? And then when you find out what the gap is, basically what the down payment is, what the equity is we got to put in, then we look for community impact investors, community impact investor in like Duncanville is somebody that's usually a baby boomer, not always.

Nothing I say is absolute, but usually a baby boomer that's worth maybe between two and 20 million in that range. Not a billionaire, but a community person maybe that's never invested in real estate before, that's interested in making their community better and they don't have to get a return like they would from Wall Street as long as you pay 'em their money back a lot of times and give 'em a little extra. And then they have pride of ownership that makes them want to get involved and they got to know you. We call it farming, but where you've worked in your neighborhood for many, many years and they got to know that you're true in what you talk about doing, about making your community better. And that's who we look like. Look for the community impact investors and that's it Alone investors, that's it. It's very simple.

It's not complicated. If you can get some tax credit financing or you get some historic tax credit money or a grant or something from the city, sometimes you have to have a little bit of something. Sometimes they just won't work. So I'm not completely against it. I don't like it. I don't think it should be the norm. I think the incentives should be the exception. When you do have, you've done everything you could with the bank and the investors and you still have a gap. You've done everything, but that's not the way we work today. It's like what can we get as a grant right up front and that drives the thing. It's more like financial architecture, so it's built around the money, not around quality of life and empowering the people and good local development.

Ann Thompson:

And sometimes you involve the people who need the help. For example, somebody who maybe has an idea for a business and also needs a place to live, and then maybe they can do both in the same space. Give us some examples of how that has worked.

Monte Anderson:

Many times I partner with, I might build a building or rebuild a building that I've got, and maybe it's a smaller building on a main street. It's not a really good investment property for me to manage and lease out of my company. It's too small. It needs to be an owner occupant. And so quite often I'll have a little building that'll have maybe two retail spaces and two apartments, and then I will look for the special entrepreneur to occupy that building. And then the way I get those special entrepreneurs to come to South Dallas or to Duncanville, which is the sides, the have-nots side of Dallas, is that I enable them to purchase that building. I might loan them a down payment, I might co-sign on the note with them, and then that's where you get the secret sauce. That's where this X factor comes. You've got this owner occupant now, and whether he's a barber or a restaurant or a candlestick maker or a butcher, all of those types of people are the special entrepreneurs that give you your culture and your special placemaking.

Ann Thompson:

You're heavier on commercial that you said, but you also do housing. You have 500 tenants. How do you work with them to afford their rent and build wealth? It sounds like some of what you just mentioned and also you encourage them to go ask relatives.

Monte Anderson:

Yes. Yeah. Housing, it is really funny about affordable housing and we do housing when it mixes in with our commercial developments because I mean, you need everything, right? You need work, live, play, the old work, live play. You need those things. But the key to, first of all, affordable housing is not the problem. It's a symptom of the problem. The problem is we don't make enough money. If we made enough money, we wouldn't have an affordable housing problem. Now you still have to deal with the symptom, right? If you're sick, you still deal with the symptom, but you also need to deal with the problem. In this case, we want people to make more money. How do they get better jobs? How do they become entrepreneurs? How do they do that? But the key to affordable housing is two things. First of all, ownership, you own a property and secondly, spending a little bit more.

In other words, if I can build a triplex and occupy one unit and have two units to rent, then I can help me make affordable payments, build income, wealth, and also provide affordability for wait staff at a restaurant or single parents who are working at the hospital at night with a child or two. It's the way that you get, because see, if you're the owner, you're not a real estate investment trust. You're not an investor. You don't have all those layers of overhead above. See an owner, an owner doesn't have all that overhead. The owner just is trying to make their payments, pay their building off. So it's not all about a financial gain, although it is. It is and it's not, but they don't have all the heavy load on top.

Ann Thompson:

I hope you're enjoying our conversation with Monte Anderson. There's still more ahead following this short break. This is Brick by Brick.

Ame Clase:

Brick by Brick is made possible thanks to the generous support of so many, including Rosmary & Mark Schlachter, The Camden Foundation, Patti & Fred Heldman, DeeDee & Gary West, The Stephen H. Wilder Foundation, Judith & Thomas Thompson, a donation in memory of Frank and Margaret Linhardt, and more. Thank you. We couldn't do this work without you.

Mark Lammers:

When we talk about thriving in our neighborhoods, I tend to think about sustainability because any improvements we make, we want them to endure, right? Hi, my name's Mark Lambers and I'm the executive producer for Brick By Brick. And while our team stays focused on exploring and uncovering the next viable solution to what ails us, we're looking to you to help hold us accountable and keep this thing sustainable. And while a donation does go a long way at CET and Think TV, in this case, we're just asking for a little time and feedback right now. There's a big green button on our website and a link in the podcast show notes to our audience feedback form. We'd be so grateful if you shared your thoughts about the work we're doing so we can keep improving and connecting solution minded neighbors like yourself with the social responses that will move our cities in the right direction. Your feedback also helps us seek funding to keep this effort going. We appreciate your time and can't wait to hear from someone in every neighborhood. Thank you.

Ann Thompson:

Welcome back to Brick By Brick. I'm Ann Thompson. Let's get back into our conversation with Monte Anderson and Emiko, Hernz and I will be back at the end for some reflections. We here at Brick by Brick use the solutions journalism model and we're wondering how easily your model can be replicated. And as you mentioned, you do travel around the country talking about it. So how easy or difficult is it?

Monte Anderson:

So I have two companies. I have a company that options real estate that works in my farm, in my neighborhood, and we only do development in my neighborhood. I don't go anywhere else and do it. But on the other hand, what we do is we saw this gap around the country in small, missing middle incremental developers, the entrepreneurial, the community developer. We saw that. And so we started out back in 2016 with the goal of creating a thousand small developers around the country, and we started out with Incremental Development Alliance, and then I was one of the co-founders, and today I'm with Neighborhood Evolution with Bernice Radle from Buffalo and Jim Kumon from Minneapolis and Mike Keen from South Bend, Indiana. And today we make up Neighborhood Evolution and what we do is we coach small scale developers and cities on how to create an ecosystem because this is a very complex business and that's why more small people don't do it.

That's why they don't, because it's too complicated, it's too expensive. I can't afford to hire mortgage brokers and lobbyists and consultants this, and so I have to surround myself with the right kind of people, and you got to know how to do that. How do you surround yourself with the right kind of people so you can pull pieces of experts anytime you need it, and therefore you can do a small scale development efficiently and profitably doing this? We've been hired. We've been hired all the way from Canada all through the United States to go in and help mostly the red lines part of cities, the sides of the cities that have been neglected for a long time, and it's through the economic development corporations, through their empowerment section of that. So it's the local and what we do, we created the 12 steps of town making, which is really a step by step of a book.

There's a book and then a system of how you have local meetings to teach yourselves. And so when we go in and talk how you go in someplace, you talk to people, you get 'em all excited, they're saying, yeah, I hear your money. This is great. We want do what you're doing. And then you leave and then they don't know what to do, and it's just a depress. You go into depression with this system, we leave this behind and this way you become, you get yourself connected to a larger ecosystem all over the country, but you're able to teach each other. You begin to teach each other, you know us, and now you can teach each other, and that's how it's scalable. And so we have 12 step meetings going in South Bend and Dallas and Sabinal, Texas and Denton, Texas and Kansas City and Lafayette, Louisiana, and soon to be in Buffalo, New York and Wisconsin in four cities, Madison, Appleton, and two other cities. And so we have 'em everywhere now. So hopefully this whole group of people are teaching their selves. And so the teaching really the people that can solve these local problems of housing, affordable housing, entrepreneurial empowerment and development are the locals. There's no way somebody from out of town can really come in and tell you what to do in your city.

Ann Thompson:

So what are the 12 steps, if I can ask? Or some of them, they may be too lengthy to go into.

Monte Anderson:

So step number one is to pick your farm. Basically decide on a neighborhood and commit to it for the rest of your life, and that changes the laws of the universe. It changes your luck, it just, things fall in order when you do that. Number two is getting to know your neighbors. The neighbors around you are going to be your ecosystem. They're your engineers, they're your plumbers, they're your tenants, they're your future buyers. They're your city council people. They're your parking lot cleaners, they're all those people. Step number three is you got to learn about the money. You got to actually understand how you can attract money. So not how to just beg for money, which I did in my early days, but how to attract money, how to make yourself attractive. Step number four is to learn how to hire the right professionals, attorneys, accountants, insurance people, because this is a legal business.

This is a very serious business. Step number five is find a small project to start just one small, one small house or maybe a duplex, maybe it's a house you're going to live in and rent out two rooms. Step number six is you take that old property and you clean it up, and then steps number seven and eight or how to develop the right teams, the right scale of architects, how to put those teams together, working with the end in mind. And step number nine and 10 and 11, you're up in the deciding on the construction method that you use, and then you're looking at how to lease or activate the space, how to manage it. As far as property management, there's two things I like to always say. In property management. You need somebody to help you with bookkeeping and you need a good maintenance person, and these two people can be part-timers starting out.

And then step 12 is basically helping others and not just helping others do this business, but get involved in your planning and zoning in your city. Get involved in cleanup days. Get involved in the local street market, get involved in giving back to your community, meet with people, have people come to your living room and have discussions and things. And then the 12 step meetings are usually monthly. Sometimes they're more, we have 'em twice monthly in Dallas, but we pick one step every time and we focus on that step, and then we talk about our experiences with each other, and then we get to know each other and we teach each other. The secret handshake of how to get money and teaching each other is so much more effective than me talking to you from a podium somewhere. It really is the best way to learn how to do this business.

Ann Thompson:

It sounds like you're moving as fast as you possibly can. I'm wondering how we can ramp up your idea even more, because we're constantly hearing, as you referenced before, that just people are extremely cost burdened, having problems, finding housing, affordable housing. How can we make this model more common?

Monte Anderson:

So I think there's two things that got to happen in a community for this to be successful. There's two things. First of all, you've got to have a business person in that community that's willing to do this work, that wants to make money and do good. A town maker, as we would call you a champion, we'd call you, and then you really got to have, we're just one of a many, it takes a village to raise a child. It takes a whole community to rebuild or build a building. It takes the whole community. You've really got to have a good city manager or a good mayor. You've got to have some people at the top in the government that are interested in this who are not just looking for, in my city here, we were thrilled to death just to get a Chick-fil-A out here.

It's like, wait a minute, is that our highest goal is to get Chick-fil-A? Really? I mean, so we've got to have people that actually get this, that understand that what farming looks like and what good farming looks like. If I start small, New York City started small, right, started, and it grew over time. You didn't just come in and put tall buildings in you and you got to have patience, and you've got to have restraint, and you've got to celebrate small successes, and you've got to go look at things. You got to go look at things because people don't respond when they don't see a big massive thing coming, they respond. So you got to watch. If you watch my projects, it's like, when did you do that? Well, when did you do that? Well, we've been doing it for the last three years. We put this one tenant in or one person in.

Then we busted up a bunch of concrete and put some landscaping in, and then we started building some houses on the parking lot, and we started 28% occupied two and a half years ago. We're 98% occupied today in building the houses. How did it happen? One 10 at a time. One finishing out one space at a time, carefully curating each person that comes in and curating doesn't mean that I'm going to always get the best thing I want. Sometimes it's getting the best of the worst, so I can't get a great coffee shop, but I got a donut shop that served better coffee. ITI couldn't get a steakhouse down here, a big bold steakhouse, but I got a little meat market to come in who would also cook the steaks for you and let you take 'em home? I couldn't get a big Indian restaurant here, which I wanted.

We were wanting Indian restaurant, but we got somebody to do a 600 square foot to go where the entrepreneur was. The chef owned the place, and you don't have to fill the space up every day with 5,000 square feet. So these smaller things, that's how you do it. You just start with one little thing at a time and you start building off of that. And the more we call it the flywheel effect, the more you go, the more it goes faster. And all of a sudden it's like, wow, where did this come from? I think we're fast. I don't think we're slow, but it doesn't look like that in the beginning. The normal development is big, right? Break ground big, and it's built us. We're slow, slow, slow, and we build momentum over time, and all of a sudden you got 50 businesses.

Ann Thompson:

Yeah, I like the flywheel example. As we close out the interview, what gives you hope? I know you've given a number of different examples, but maybe what somebody has said or what a developer has done, what do you see in the future and what gives you hope?

Monte Anderson:

What gives me hope right now is that the young people that, and in fact, my granddaughter works with me in this office, and the young people that I talk to today, some people will say, well, they don't want to work. And I will say this, they do want to work, and they do want to make money, but they're not going to work like we did as baby boomers for just a paycheck. It has to have purpose. They want purpose, and that gives me hope today that our young people, they're thinking about making money. They are. I've talked to a lot of them. They are thinking about making money. They're not too idealistic of, oh, I'm going to save the world, and money's evil and all of this. They want to make money, but they also need, they want have a purpose. They want to do something that matters.

Ann Thompson:

Well, thank you for all your efforts. We'll be following your progress. Monte Anderson, thanks for being on Brick by Brick.

Monte Anderson:

Thank you. Glad to be here today.

Ann Thompson:

Remember, if you're interested in digging deeper into our conversation with Monte Anderson and want to learn more about Brick by Brick in general, there are plenty of web articles and videos. Go to cetconnect.org and thinktv.org, and we'd like to hear from you. Click on one of the big green buttons to share your feedback. Monte Anderson thinks big, so why can't we? And we say hi to Hernz Laguerre Jr. 

Hernz Laguerre Jr.

Hello

Ann Thompson

And Emiko Moore. 

Emiko:

Hello

Ann Thompson

 Hernz, what are your thoughts?

Hernz Laguerre Jr.:

Yeah, well, first off, Ann, I thought that was a really awesome interview that you had with Monty. I think you really focused on two things that I thought were important, intentionality and investment. What do you want in your community and can you commit to providing resources to this want for life? He was very big on having that lifetime commitment

Ann Thompson:

Exactly.

Hernz Laguerre Jr.:

To your community, and I think if the local community intends to build and keep their community, the investment must come from them. Issa Rae, she's an American actress and producer. She has a philosophy about networking horizontally as opposed to vertically. I connect that to what Monte said about reaching out locally for resources as opposed to just relying upon government subsidies.

Ann Thompson

Yeah, that’s so true.

Emiko?

Emiko Moore:

Yeah, for me, Monte Anderson has kind of this folk hero quality about him. As I was listening, he kind of reminds me also of Margy Stagmeier, author of Blighted who Ann you interviewed previously, and they both really care about community and their actions show that they're invested in building a neighborhood and a community and not just investing to make money. They're both doing this also in areas that other people are not showing interest in investing. 

Ann Thompson:

I really liked the analogy to the folk hero. I think that it perfectly sums it up as far as the nuts and bolts of what Monte Anderson was talking about. He said, as you heard in the interview, that you have to have a business person in the community. This person could be called a town maker, somebody who's willing to do the work and wants to make money and do good like a developer, and they have to get investors. And he described them as usually a baby boomer. Not always. That's worth maybe between two and 20 million. Not a billionaire, but a community person that's never invested in real estate, that's interested in making their community better, and they don't have to get a return like they would on Wall Street.

Hernz Laguerre Jr.:

No. Yeah. I think it makes sense to really focus on the people in the community, because I'll use you two as an example. Both of you two are from Lebanon, Ohio, so you guys have much more of a connection to that city than me or any outside investors. So if you guys were to, let's say, invest into that neighborhood, it would mean more because you guys grew up there. You guys have a connection to that community.

Ann Thompson:

We're not looking to take our business elsewhere.

Hernz Laguerre Jr.:

Exactly. Exactly.

Ann Thompson:

That's right. We're wondering, is there a street in your neighborhood that needs to be redeveloped, and are you willing to take on the project, or is there somebody who is? Well, tell us about it by going to our website and clicking on the big green button. Thanks for the takeaways, guys.

Hernz Laguerre Jr.:

No problem.

Emiko Moore

Thank you

Ann Thompson:

Since its creation in the 1980s, the low-income housing tax credit or LIHTC has helped fund the construction of three and a half million housing units.

Anthony Orlando:

The low-income housing tax credit program has been a tremendous success in building affordable units and in preserving affordable units because it's one of the largest sources of affordable housing units in the country.

Ann Thompson:

Despite its success, there are critics of this housing program, one calls it the biggest boondoggle the country has ever seen on the next Brick by Brick, a closer look at the federal tax credit program, LIHTC and the strings attached. 

That's our show. If you like what you hear, please rate and review our podcast. It helps make it easier to find. We hope you learn something, and if you did, please share it with your friends and family. For Hernz Laguerre Jr. And Emiko Moore, I'm Ann Thompson. We'll be back soon with more solutions. Take care. 

Our show is produced, hosted an edited by me, Ann Thompson with reporting and story editing from Hernz Laguerre Jr. and Emiko Moore. Our Executive producer of Mark Lammers. Our show consultant is Gloria Skurski. Gabe Wimberly is our audio engineer and mixer. Zach Kramer runs the lights and cameras. Derrick Smith is our production specialist and Jason Garrison is our production manager. Kellie May heads up our marketing and promotions, along with Mike Shea and Bridgett Dillenburger. Elyssa Stefenson handles the website and Steve Wright is our designer. Bill Dean and Andres Kruza are the engineers for the show and our Chief Content Officer is Colin Scianamblo. Our music is from Universal Production Music. Brick by Brick: Solutions for a Thriving Community is a production of CET and ThinkTV, Southwest Ohio PBS member stations.